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Ad Valorem tax is based on the value of property, not a usage tax and follows the property from owner to owner. Therefore, unlike registration fees, taxes accumulate even when a vehicle is not used on the highway.

An ad valorem tax lien attaches to a vehicle on (1) the date an individual permanently brings the vehicle into Alabama, (2) the date the vehicle is sold from a dealer’s inventory, or (3) the date a vehicle is sold by an individual or organization that is exempt from ad valorem taxes, or (4) upon the date a motor vehicle otherwise becomes subject to taxation

What are “Back Taxes”

When a vehicle is purchased that has delinquent taxes, the tax official must determine the number of months that ad valorem taxes are due and collect those “Back Taxes” at the time of registration.

If the previous tax dates can be determined through the State MVTRIP system, then Back Taxes are charged from the last registration expiration date to the purchase date. The maximum number of months of Back Taxes that may be charged is 12 months.

If the number of months of delinquent taxes cannot be determined through the State MVTRIP system, then the vehicle will be presumed to have been in the state for one preceding year and 1 year of Back Taxes will be collected.

If the taxes on a vehicle are delinquent and it has been in the possession of an Alabama Automobile Dealer, then the Dealer should provide the purchaser with a Dealer Affidavit indicating the date they took the vehicle into their inventory. The purchaser will not be charged back taxes during the months that the vehicle was in the inventory of the Automobile Dealer. This Dealer Affidavit must be presented to the Licensing Official at the time of registration; it cannot be brought back at a later date for a refund to be issued. (Alabama Department of Revenue Motor Vehicle Administrative Rule 810-5-1-201)

These tax laws are found in the Code of Alabama, section 40-12-253.

What are “Escape Taxes”

If the owner of a vehicle has not renewed a vehicle registration for a period of time; and they decide to renew / reregister the motor vehicle, the customer will be required to pay the delinquent “Escape Taxes” for up to 2 years. In addition to the Escape ad valorem taxes, tag fees for the delinquent years will be due as well as a $15 penalty.

In the event that the motor vehicle is removed from service prior to the beginning of the registration year, and remains out of service throughout the entire registration year, the owner, when reregistering the vehicle will be subject to registration fees for the registration year when the vehicle is placed back into service. The owner will need to provide proof of such storage or vehicle non-use at the time of re-registration. (Delinquent ad valorem taxes for up to 2 years will still be due; the proof of storage only waives the registration (tag) and penalty fees)

Some examples of proof of storage would be:

An affidavit completed by the vehicle owner, neighbor or staff of a the storage facility

A receipt(s) indicating payment to a storage facility

A letter from appropriate military official on military letterhead indicating that the serviceman stored his vehicle at a military base

These tax rules are found in the Alabama Department of Revenue Administrative Rule 810-5-1-244.